More thoughts: bailout fallout

The Senate is set to vote on the bailout presently, so I thought I’d add some more thoughts before that. Quick civics lesson: the gravitas of the upper chamber in the American legislature, combined with the relatively greater insulation from public opinion that a six year term affords, have traditionally resulted in greater bipartisanship. I imagine the bill will pass. Of course, I thought it would pass in the House as well.

First, in the comments section of yesterday’s post, Bradley has weighed in with an excellent, substantive overview of the issues at stake from a financial perspective. I strongly encourage you to read it.

Second, I forgot to add yesterday that perhaps another reason to support the bailout is that there is less choice about government intervention than it seems. Both the Fed and the Treasury have made it clear that, absent any new authorization, they will continue to intervene in the markets as necessary (provided they have the legal and monetary capacity to do so).

Turning to political ramifications, our friend Rory over at IPE-J noted today that the US presidential race is starting to break for Mr. Obama. Indeed, all the major poll-aggregators (which are more accurate than individual polls: I like Pollster and FiveThirtyEight) have noted significant swings following the first debate, both at the national level and in the major swing states. This bodes well for the prediction I made back in July. No matter how much you claim to be a maverick, people need someone to blame when the economy is doing poorly. Right or wrong, the incumbent party invariably takes the brunt of voters’ anger. Also, the fact that Sarah Palin is one of the most unqualified candidates to run for high office in the history of the United States doesn’t help. Her favorability ratings have plummeted from 47% favorable/23% unfavorable on Sept 11th, to 36% favorable/ 39% unfavorable today. She's done an admirable job of shoring up Mr. McCain's right flank, but she's making him less appealing to indpendent voters in the center of the political spectrum. Perhaps things will change if Putin rears his head in the near future.

As Rory presciently notes, Mr. McCain really needs Mr. Obama to forget to wear clothes to the next debate.